Thoughts on the Eurozone crisis

I must admit to having rather mixed feelings about the ongoing Eurozone crisis. From my leftist point of view the difficulties besetting the neoliberal Euro project should be encouraging, since they expose the democratic deficit at the heart of the EU, which one might imagine would raise public consciousness about the need for progressive social change, but, on a more personal level, the prospect of the European economy entering a prolonged period of recession, with the accompanying political turmoil, is rather unsettling.

People have been comparing the current crisis to the situation in Europe during the inter-war period, which obviously didn’t work out too well, what with the rise of Fascism and the mass destruction of the Second World War. That may have sounded a bit hyperbolic a few months ago, but events since then on both sides of the Ionian Sea have added to the general sense of gloom, and the transparent inability of our political leaders to address the problems hardly inspires confidence.

Things went badly wrong the 20s at least in part due to the mishandling of the situation by the Comintern, but at least back then there was an international Communist movement, with influential mass parties in most European nations, and the still-fresh example of the Bolshevik revolution to provide inspiration. Today the organised left is much weaker, and such opposition as there is tends to coalesce around disparate formations like the “Occupy” movement, which are all over the place politically, and in some ways openly reactionary.

So I’m finding myself hoping that the Eurozone leaders will pull some sort of rabbit out of the hat, probably involving the ECB issuing Eurobonds to relieve the difficulty Italy is having accessing credit at affordable rates. As these will be underpinned by the German economy, the quid pro quo will be Berlin taking over control of financial policy for the Eurozone as a whole, since the prospect of the ECB printing money to bail out the Greeks and Italians terrifies the Germans who remember the hyperinflation of the Weimar era.

It probably won’t take a great deal of time for the populations of Italy, Greece and the other peripheral economies of Europe to wake up to the fact that they are being forced to endure severe austerity by politicians over whom they have no democratic influence. What will happen then is the big question; the stage would be set for a populist neo-fascist movement, but hopefully the left will have enough time to formulate a coherent response, and to get sufficiently organised to withstand the troubles that lie ahead.